FAIRBANKS (AP) -- A popular state program that subsidizes loans for first-time home buyers is being put on hold, because the state has less money to help the buyers.
Middle-class families, the target of the now-suspended program, will now have to seek a home loan interest rate subsidy elsewhere -- where lenders say the deal isn't as good -- or not at all. The suspension could hurt low-income home buyers as well.
''It was a really difficult situation for us because a lot of these programs are popular,'' said Bob Grove, a Fairbanks member of the board of directors of the Alaska Housing Finance Corp., the state agency that helps home buyers. ''We just had to really make some tough choices.''
The AHFC suspended the Taxable First Time HomeBuyer program on Tuesday, and scaled back several other programs, also for financial reasons.
The program is meant to help middle-class home buyers who don't qualify for the Tax-Exempt First Time HomeBuyer program, a program with a better interest rate but more stringent income qualifications. Buyers who use the tax-exempt program cannot buy a house worth more than $122,700.
The moratorium on the taxable program, effective April 15, is going to be hard on both medium- and low-income home buyers because of the housing market in Fairbanks, officials said.
Few homes are available in and around Fairbanks at or below $122,700, said Cathy McArdle, senior loan officer at Alaska USA Federal Credit Union. Buyers who qualified for the tax-exempt program often used the taxable program for that reason, she said. They couldn't find a house at or less than $122,700.
The average amount borrowed by people in Fairbanks and North Pole last year under the taxable program was $134,000. The program's home-value limit is $225,000.
The AHFC board spent weeks seeking public input before making the changes.
''We were kind of faced with a situation of having to do triage,'' Grove told the Fairbanks Daily News-Miner.
The board chose to change offerings it believed were duplicated through programs other than the state's and programs where the segment of borrowers affected aren't the most in need, Grove said.
The Tax-Exempt First Time HomeBuyer program for low-income borrowers was left intact.
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